Can Cryptocurrency Be Considered A Real Asset Class Or Currency?

In this six-part series, Moguldom tries to get inside the head of Miami tech entrepreneur Brian Brackeen, CEO of Kairos. We want to know how he thinks, and what it takes to grow as a tech startup founder. This is Part 2 of the series.

Brian Brackeen has managed explosive growth at his Miami-based facial recognition firm, Kairos, raising more than $5 million in venture capital, and he did so the old-fashioned way — with traditional venture capital.

Brackeen’s investors include Morgan Stanley. Kairos is one of five startups run by women and founders from underrepresented groups that will be starting three months of incubation in November at Morgan Stanley’s new startup accelerator.

We asked Brackeen what he thinks of cryptocurrencies and initial coin offerings, and whether he has any use for them, considering that people are taking out mortgages and using retirement funds to buy into them.

When experienced and sophisticated investors read about the herd jumping into a hot new thing that has run up over 500 percent in a matter of months, they get concerned that the market could be in a bubble.

Many experienced investors went through the boom-and-bust cycles of tech stocks in 2000 and real estate in 2008. They’re familiar with the story, “it’s different this time.” They can recognize when something smells bubblelicious.

Bitcoin “has real world value and prices should continue to increase or remain fairly stable going forward,” said engineer and financial analyst Ulfred Wong in a Seeking Alpha report.

That was June 17, 2017. Bitcoin was trading at $2,303. Its value rose to around $5,000 in early September. As of this writing, the value of a single bitcoin BTCUSD is at $3,349, representing $27 billion loss of market value in the world’s No. 1 cryptocurrency, Market Watch reported.

Brackeen says he doesn’t have much experience with cryptocurrencies, but that’s not necessarily true of his customers.

“We have a lot of customers looking to use facial recognition to tie together identity and the owner of that currency,” he told Moguldom. Here’s a little more insight from the Kairos CEO:

Brian Brackeen, CEO of Kairos. Photo: Anita Sanikop/Moguldom

Moguldom: Are you personally an investor in any cryptocurrencies and are you a believer in its sustainability as a viable global currency?

Brian Brackeen: I went to a tech event and bought all I had on me at the time, which was like $7.25 worth of bitcoin. That was four years ago. Maybe it’s worth like a couple of hundred bucks now, which is amazing. That’s the extent of my exposure to it. I will say from a business perspective, we have a lot of customers looking to use facial recognition to tie together identity and the owner of that currency.

Moguldom: Has Kairos looked at tapping the ICO market for funding?

Brian Brackeen: We have. You see so many successes in ICOs with businesses a lot worse than ours. We feel like we’re pretty venture-investible at this stage. We’re working with Morgan Stanley and others. It continues to be so, so we’ll probably continue on the traditional route. But I’ll say capitalism and liquidity theoretically should find people equally, right? Theoretically. It’s the humans who mess it up. I think adding ICOs to the mix only helps solve the problem for traditional ventures as well because it’s competition.